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The US has appealed a WTO decision upholding Indian import taxes on products such as Napa Valley wine and Jack Daniel's whiskey.
In a legal filing last week, Washington said the WTO's findings were "in error" and based on "erroneous findings on issues of law" when it rejected in February a US complaint over extra duties that India applies to American wines and spirits.
The US appeal has been posted on WTO website. The verdict five months ago was not a massive loss for the US because India already had lifted some of the taxes it was imposing on foreign wine and spirits last year, bending to heavy pressure from the US and Europe.
While Brussels dropped its WTO complaint as a result, Washington continues to press its case. India's basic import duties on wine and spirits reach 150%, within WTO limits. However, various government surcharges take the charge up to as high as 550%, depending on the Indian state. Tamil Nadu has gone furthest, shutting out foreign alcohol and allowing shops to sell only made-in-India spirits and wines.
India is one of the world's largest markets for alcohol with a huge potential to grow, but imports account for only a meagre share of total consumption. Brussels and Washington have argued that the tariffs represented unfair trade barriers keeping foreign countries from competing in India's market.
The US, the 27-nation EU and Japan, by contrast, allow nearly all spirits to enter their markets duty-free. China tacks only a 10% charge on foreign liquor.
Washington says wine sales in India through special duty-free rules, such as at airports and luxury hotels, grew by 350% between 2000 and 2005. The growth was 200% for American liquors.
But the total volume of US exports remained low because of the high import duties. The Distilled Spirits Council of the US estimates that all foreign liquors together account for less than 1% of the Indian market. (Source: The Economic Times)
August 8, 2008
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